A Hong Kong court has leveraged tokenization technology to serve a legal injunction on two cryptocurrency wallets. The case stems from a fraudulent scheme in which marketing consultancy Worldwide A-Plus lost over $2.6 million in Tether (USDT) to scammers posing as representatives of a hacked online platform.
High Court Deputy Judge Douglas Lam issued the injunction on December 5, prohibiting the disposal of assets tied to the wallet addresses worldwide. In an innovative twist, the order was tokenized and transferred to the Tron blockchain wallets as a “digital legal notice.” This method effectively labeled the wallets as holding illicit funds, creating a virtual “police cordon tape” to deter further transactions.
Blockchain public records revealed that one wallet still held $1 million in USDT two weeks after receiving the notice, while the other was nearly emptied, containing only $1.28. Despite the wallets remaining operational, the tokenized notice serves as a warning to exchanges and law enforcement agencies to flag transactions from these accounts.
Joshua Chu Kiu-wah, a technology lawyer and consultant on the case, emphasized that this marked the first successful use of tokenization for serving legal notices in a major common law jurisdiction. Chu likened the approach to placing digital caution tape over illicit accounts, stating that any transactions involving these wallets could implicate participants as accomplices.
While courts in the United Kingdom have experimented with serving orders via non-fungible tokens (NFTs), Chu noted that tokenization on the Tron blockchain proved more effective as a law enforcement tool. He further highlighted that this achievement not only set a legal precedent but also demonstrated Hong Kong’s technical capabilities, positioning the city as a global leader in real-world blockchain applications.
The tokenized injunction is the latest in Hong Kong’s efforts to adapt its judiciary to the evolving Web3 ecosystem. Last year, the city’s courts made waves by compelling a decentralized autonomous organization (DAO) to disclose financial information, showcasing its ability to navigate novel legal scenarios.
Legislator Johnny Ng Kit-chong hailed these developments as pivotal for Hong Kong’s Web3 ambitions, though he cautioned that public understanding of virtual assets lags behind that of regional competitors like Singapore and South Korea. He urged the government to refine regulations to attract professional investors and global blockchain firms, further solidifying Hong Kong’s status as a tech hub.
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